Becton Dickinson deals controlling half of respiratory business to Apax Partners

Becton Dickinson & Co. (NYSE:BDX) said today that it inked a deal to sell a 50.1% stake in its respiratory business to private equity giant Apax Partners for an undisclosed amount, forming a joint venture to operate the unit as a stand-alone company.

The new entity will take BD’s ventilation, respiratory diagnostics, vital signs and AirLife businesses on board. The deal values the 5,000-worker respiratory business at $500 million; it’s expected to post annual sales of roughly $900 million, the companies said.

“We have determined that the respiratory solutions business and its associates will be best served under a different ownership model that will provide more strategic focus and investment to grow the business into a pure-play, global respiratory care leader,” BD medical segment president Tom Polen said in prepared remarks. “We believe in Apax Partners’ track record of success creating value and improving margins, and as part of the joint venture, we will continue to have a strong interest in the growth and success of the business.”

BD said its respiratory operations in Yorba Linda and Palm Springs, Calif.; Plymouth, Minn.; Mexicali, Mexico; Cotia, Brazil; Hoechberg, Germany; and Shenzen, China are all included in the deal, which is expected to close in late fiscal 2016 or early fiscal 2017. BD said it plans to use the proceeds to buy back its own stock. The move is expected to dilute fiscal 2017 earnings by 10¢ to 14¢, the company said.

The move isn’t the 1st foray into medical devices for Apax, which along with its Canadian pension fund partners spent $6.3 billion acquiring Kinetic Concepts Inc. in November 2011.

“We have been proactively targeting the industry for respiratory devices and have been impressed with the continued progress the company has made over the past few years,” Apax partner Steven Dyson said today. “We are pleased to have the opportunity to work with the entire team in further developing respiratory solutions’ position as a focused and leading global player. In order to take advantage of this opportunity, we are highly supportive of an investment program to further strengthen the business’s existing platform, both organically and through acquisitions.”

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